A state administrator cannot require the registration of federal covered securities in the state. Federal covered securities include any of the securities listed below:
- Exchange-listed Securities - This refers to any security listed on the New York Stock Exchange, American Stock Exchange or Nasdaq, as well as senior securities (such as preferred stocks and bonds of a company whose stock is so listed).
- Investment Company Shares - This refers to mutual fund shares issued by a registered investment company and sold to qualified purchasers (an individual with at least $5 million in investments or investment managers with at least $25 million in assets under management).
- Initial Public Offerings - A state administrator cannot require registration of IPOs, but they can require a notice filing in the state and a payment of a filing fee.
Exam Tips and Tricks
Questions about securities registration tend to be very straightforward. Remember that only two questions involving securities registration are scheduled to be on the exam. Here are two likely questions involving exempt securities or transactions:
Which of the following securities is NOT exempt under the Uniform Securities Act?
- Limited partnerships
- Convertible bonds of a NYSE-listed company
- U.S. Treasury bonds
- Stock issued by a nonprofit organization
The answer is A, since all the other options listed are specifically exempted.
- ABC Corporation has never previously issued securities registered by the SEC. It can register in the state by which method(s)?
- Registration by filing
- Registration by coordination
- Registration by qualification
- Registration by administration
- I only
- II only
- II and III
- I, III & IV
The correct answer is C, since registration by filing is only available to companies that have previously registered securities with the SEC, and registration by administration is not a valid registration method.
InvestingLearn what you need to know about the state securities administrator to pass the Series 63 exam.
InvestingThe primary markets are where investors can get first crack at a new security issuance.
MarketsUnderstand the differences between a trade name and a trademark, the different functions they serve and registration considerations for business owners.
InvestingLearn what you need to know about the creation and components of a mutual funds to pass the Series 6 exam.
ETFs & Mutual FundsA general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.
Financial AdvisorDiscover some of the most important steps you need to take after making a decision to change your legally established business name.
InvestingEven if you don't invest a cent in stocks, you should still understand how the stock market works. Find out why.
TradingMarketable securities are financial instruments that can be readily bought and sold in a public market. The key feature is the ease with which it can be sold and converted into cash. Usually, ...
InvestingFiling with the SEC is not as complicated as you might thing -- just be meticulous about following the steps.
MarketsCommercial paper is a short-term debt security issued by financial companies and large corporations. The corporation promises the buyer a return, or profit, for making the loan. The return is ...